Monday, February 13, 2006

Book Review: The Capitalist Manifesto by Andrew Bernstein

NB: This review is by Gideon Reich and is the first installment of CAC's new "Capitalist Book Club" series.

As recently as the late 1980s, intellectuals were still discussing the supposed approaching convergence between communism and capitalism. It was claimed that the capitalist United States was suffering from an inadequacy of social services, while the Soviet Union failed to protect personal freedom. Faced with such problems, it was argued that the US and Soviet systems would eventually meet halfway, with the US becoming more socialist and the Soviet Union less totalitarian.

It wasn’t until the collapse of the Soviet Union in 1991 that the absurd notion of "convergence" was finally discredited along with most remaining hopes of establishing a so-called socialist paradise. Partly as a result, there was a resurgence of interest in capitalism and the reasons for its success, and a host of books have since been published seeking to explain various aspects of the capitalist system.

What was missing, however, was a single volume that presented the historical origins, moral justification, and practical success of capitalism. Such a volume would correct the misconceptions most people still have of capitalism’s origins and early history, and answer their misgivings over the justice of laissez-faire. Andrew Bernstein’s The Capitalist Manifesto succeeds admirably as such a book.

The Capitalist Manifesto covers the history of the pre-capitalist era, the dramatic positive effects of the industrial revolution and its origins from within the Enlightenment ideas of the 18th century. Describing the American Enlightenment, Bernstein observes:

..[T]he essence of the Enlightenment, and of its influence on the new nation, was its uncompromising commitment to man's faculty of reason. For this, the 18th century philosophes owed much to Newton. It is not merely the birth of the principle of individual rights during this period that is important. As will be seen, capitalism rests upon the reverence for the reasoning mind that is the hallmark of Enlightenment thought and culture. (p.42)

The identification of reason as the primary tool of production is an important theme of the book and this identification serves to integrate its various parts. Relying on the philosophy of Ayn Rand in the excerpt below, Bernstein explains that reason is man’s only means of survival and he ties its use to the historical facts:

The goods and services that men must produce to sustain their lives are myriad. From pens and pads, to rich agricultural harvests, to skyscrapers and cities, to a multitude of others, man's productive activities are fundamentally reliant on one human faculty: his reasoning mind.

Human beings come on earth unarmed. Whereas animals survive by means of a physicalistic characteristics as size, strength, footspeed, wings, etc., man has no similar abilities. His brain is his only weapon. To build shelter, he must know at least the rudimentary principles of architecture. To cure diseases, he must study medicine. To grow crops and to domesticate livestock, he must understand the basics of agricultural science. All of this, indeed, every advance and creation on which human survival depends, requires rational thought.

This central truth of human life was illustrated by the glorious achievements of the Scientific, Technological and Industrial Revolutions described above. (p. 188)

Among the various historical episodes in the book, Bernstein depicts the Scottish Enlightenment, which he views as having taking the lead in applying reason and science to material problems. In the 18th century, Scotland

…aspired to the Enlightenment ideal, upholding secular rationalism and the rights of the individual….It stood for capitalism, the rising middle class, an emphasis of education and enlightenment, an industrious work ethic and repudiation of the warrior-plunderer code—and as a consequence, growing urbanization and prosperity. (p. 77)

It is through its detailed and extensive moral defense of capitalism that The Capitalist Manifesto stands out from among books on capitalism. In addition to chronicling the beneficial practical results of capitalism, Bernstein identifies the nature of value and moral principles and explains how capitalism is the only social system that supports the principles consistent with man’s nature and the requirements of his life. While familiar to readers of Ayn Rand’s Capitalism: The Unknown Ideal, the ideas within the Manifesto’s philosophical chapters provide a perfect complement to Bernstein’s detailed coverage of the history and origins of capitalism.

There are numerous other gems in the book, including an extensive polemics section in which Bernstein demolishes the arguments that capitalism is the cause of slavery, imperialism, and war.

Unfortunately, in this age when most history texts are still under the influence of modern variants of Marxism, people receive profoundly misleading ideas about capitalism’s history, practice, and morality. The Capitalist Manifesto is the ideal antidote to the kind of education most people are receiving today. It deserves to have the widest possible readership.